Dubai's Abraaj posts $188m loss after using investor funds

Abraaj Holdings, the Dubai-based private equity firm that’s being restructured, posted a loss of $188 million at the end of March after dipping into investors’ money to run its operations, according to a court filing by joint liquidator PwC.

Abraaj owes lenders $1.1 billion after the delayed sale of K-Electric in Pakistan forced it to dip into its healthcare fund without investor consent, according to the report filed to a Cayman Islands court on July 11.

It has total assets of $1 billion and the total net realizations from assets available to the provisional liquidation estate is $147.7 million, the report shows, and its limited-partnership stakes total $645.8 million.

Deloitte and PwC were hired as provisional liquidators of Abraaj, once one of the biggest private equity firms in the Middle East, as creditors attempt to salvage some of its assets.

The buyout firm ran into trouble after being accused of commingling money in a $1 billion healthcare fund, setting in motion a series of events culminating in a voluntary liquidation filing in the Cayman Islands last month.

A representative for Abraaj said they couldn’t comment on the report. PwC declined to comment.

Abraaj has faced a liquidity crisis since it emerged in February that some of its investors, including the Bill & Melinda Gates Foundation, commissioned an audit to investigate the alleged mismanagement of money in its healthcare fund. The buyout firm has been seeking to sell its fund unit and also the stakes it owns in the funds.

Cerberus Capital Management and Colony Capital made new offers to buy Abraaj Group assets, people familiar with the matter said this week. Commercial discussions on the sale of the firm’s asset management business are ongoing, a spokeswoman for Abraaj said at the time.